Asked by Kendra Quarles on Jun 06, 2024
Verified
Economic value added (EVA) is also known as
A) excess capacity.
B) excess income.
C) value of assets.
D) accounting value added.
E) residual income.
Economic Value Added
A measure of a company's financial performance based on the residual wealth calculated by deducting its cost of capital from its operating profit.
Residual Income
Another term for economic value added (EVA).
- Grasp the concept of Economic Value Added (EVA) and its significance in assessing firm performance.
Verified Answer
DM
Dlamuka MinenhleJun 10, 2024
Final Answer :
E
Explanation :
Economic Value Added (EVA) is essentially the same as residual income, which refers to the net income generated by a company beyond the minimum rate of return expected by its shareholders or investors.
Learning Objectives
- Grasp the concept of Economic Value Added (EVA) and its significance in assessing firm performance.